Higher-for-longer now applies to more than just the federal funds policy rate. It means a regime change for companies of all sizes when it comes to the cost of financing expansion or funding their operations. Whether it be high single-digit borrowing costs for large multinationals or double-digit ... READ MORE >
Joseph Brusuelas
Geopolitical tensions and the rising oil risk premium threaten global recovery
Global oil markets are pricing in a risk premium of $7 to $10 a barrel in the wake of Iran’s drone attacks on Israel over the weekend, posing the single largest risk to the current global economic recovery. Despite in the rise in the risk premium, reflected in futures markets, early trading in oil ... READ MORE >
Financial markets update: An improved outlook for corporate borrowing
Improved financial conditions, a dynamic labor market and wage growth that is exceeding inflation all should bolster corporate earnings this year in the United States. Most important, with productivity improving, the potential for greater corporate profits and rising margins will be a theme in ... READ MORE >
U.S. jobs report: American exceptionalism amid dynamic growth
While it’s always good to identify risks to the economic outlook, too often market players mistake the condition of a few trees—there are always isolated problems—with the health of the forest. The March jobs report shows just how healthy the American labor market is, despite isolated criticisms. ... READ MORE >
Initial claims reflect remarkable job security in American economy
Initial claims for jobless benefits for the week ending March 30 show that American workers continue to have remarkable job security. First-time claims increased to 221,000 from an upwardly revised 212,000 during the previous week, which was modestly above our preferred metric, the 13-week moving average, ... READ MORE >
Full employment, low inflation and a virtuous cycle in the American economy
Until recently, the idea that economy could simultaneously have low levels of unemployment and low inflation seemed to be a fantasy. Conventional wisdom, after all, holds that when unemployment is low, businesses need to pay higher wages to attract workers, which pushes up the cost of goods and services, ... READ MORE >
RSM US Manufacturing Outlook Index: The Boeing effect takes a toll
The RSM US Manufacturing Outlook Index declined in March to 1.8 standard deviations below the levels of activity that would normally be expected, reflecting sluggish activity across the production sector in general and the problems at Boeing in particular. Only the Philadelphia region offered signs ... READ MORE >
Federal Reserve’s policy path points to a rate cut in June
Our modified Taylor Rule implies that the federal funds policy rate should be reduced to a range between 4.75% and 5% in the near term which underscores our call for the Federal Reserve to reduce its policy rate at the June meeting. Given our forecast of a modest 2.1% pace of growth this year, a cut in ... READ MORE >
The Fed at an inflection point: A webinar from RSM US and U.S. Chamber of Commerce
After two years of tightening monetary policy to restore price stability, the Federal Reserve is at an inflection point as it considers interest rate cuts. With inflation easing and the labor market showing signs of softening, the Fed has signaled that it intends to cut rates three times this ... READ MORE >
Fed holds rates steady as it implies three rate cuts in 2024
The Federal Reserve is looking to cut its policy rate three times this year, according to information inferred from the Summary of Economic Projections and policy statement released on Wednesday. The cuts would reduce the policy rate by 75 basis points, from the current range between 5.25% and 5.5% ... READ MORE >